Facebook Inc. (NASDAQ:FB) has been struggling mightily, and is probably one of the most-covered struggling stocks in recent history. But there has been some thought about whether Facebook might be helped if it joined the NASDAQ-100 Index, a special place for 100 non-financial stocks on the NASDAQ and those companies create an index that is used as a guage of the overall NASDAQ market.
To be one of those elite 100 companies would grant Facebook Inc. (NASDAQ:FB) some respect and gravitas to investors. Or so it is thought. Turns out, one blogger actually did some journalistic research and discovered that the trend has been that such that Facebook investors who truly care about the success of Facebook Inc. (NASDAQ:FB) – should tell Facebook to avoid the index with a 100-foot pole.
The blogger researched some of the most recent additions to the NASDAQ-100 over the last couple of years, and what he found was striking – he found that more companies lost stock value than moved higher since they were added to the index. He noted that of the 20 stocks he noted as additions to the index since late 2010, only four have outperformed the index since joining, while seven have been in the red. Since late 2010, though, the index as a whole has gone up 21 percent.
If Facebook Inc. (NASDAQ:FB) does join the index, though, this piece of research may actually justify the company leaving the index – five of 20 stocks that were kicked out of the index have actually done better than the index since leaving. One example is Dish Network Corporation (NASDAQ:DISH), which has nearly doubled since it got the boot.
However, Facebook Inc. (NASDAQ:FB), due to its current $40 billion market cap, would qualify as a NASDAQ-100 invitee. And the fact that Facebook has a much shorter history than some of the other companies on the index, so the trend might not apply to Facebook Inc. (NASDAQ:FB). But since it’s eligible to get an invitation to join the index (which seems to have significant turnover, as 20 companies have joined and been kicked out in two years), it’s likely it might be invited. But would such a move be a resume boost for Facebook Inc. (NASDAQ:FB) with investors like hedge-fund manager George Soros of Soros Fund Management?